Happenings @ IU EURO and current events of Europe

David Cameron, Britain, and the EU

Britain has a complex relationship with the European Union. Officially a member state since 1973, Britain rivals Germany and France as one of the larger countries in terms of economy and population. Britain also has Europe’s most powerful military and it has a unique relationship with its former colony, the United States. The British Pound is strong measuring at 1.5849 USD as of November 16, 2012, and at 1.24262 euros as of November 15, 2012. Britain’s economy is not what its leaders and citizens would like it to be, but compared to the Mediterranean countries, it is much better. British unemployment as of November 2012 is 7.8% compared to the EU average of 10.6%. Projected economic growth in real GDP for Britain is -0.3% for 2012, while France and Germany are expected to grow at 0.2% and 0.8%, respectively. The main issues concerning Britain are the problems surrounding Greece, Spain, and other Southern European countries.

Britain is not a member of the Eurozone and has no plans to join it. Britain also does not participate in the Schengen Agreement, the agreement between European countries that allows for passport-free travel. In general, Euroskepticism prevails in Britain and has at one time or another been prevalent in both major parties, Labor and the Conservative Party. The Labor Party used to be Euroskeptic prior to the 1990s based on its view of the EU as capitalist in nature, but in the 1990s Labor grew to like to EU while the Conservatives became worried about the EU’s growing power and its Labor-favorable legislation concerning social and employment issues (“Labour and Europe. Playing With Fire.,” The Economist. Nov. 10, 2012. Pg. 59) Currently, Conservative Prime Minister David Cameron has voiced his opinion on Britain and the EU stating his desires to see the EU budget frozen. If this does not happen, he will veto the budget. Some of his Tory MPs even want Britain out of the EU, putting Cameron in a difficult spot. Labor is mounting a campaign to exploit the anti-EU stance of some Tories. Cameron does not wish Britain to pull out of the EU; rather, he would like to see a new British-EU relationship, one in which Britain can continue to retain much of its sovereignty.

Rebel Tory MPs joined Labor in defeating Cameron’s legislation to freeze the 2014-2020 EU budget. The rebels want a cut in the budget, not just a freeze of spending. Cameron knows this defeat, his first, is difficult for his leadership image. Ultimately, Cameron’s decision to veto the budget or not will directly influence the possibility of an EU banking union with a single supervisor in an attempt to create more structural variable geometry. Cameron is also worried about the next election. He must get his MPs to vote in line with his views in order to prevent Labor from capitalizing on Tory Euroskepticism and the image of Tory weakness. In short, Britain remains a reluctant member of the EU, and its future role in the organization is uncertain.